GBS: Electronic Rights Disputes Heating Up

Last Friday, Random House circulated a letter describing its digital publish efforts. The most interesting part of the letter was a long paragraph arguing that Random House already holds electronic rights to most of the titles in its backlist:

The vast majority of our backlist contracts grant us the exclusive right to publish books in electronic formats, as well as more traditional physical formats. At the same time, we are aware there have been some misunderstandings concerning ebook rights in older backlist titles. Our older agreements often give the exclusive right to publish “in book form” or “in any and all editions”. Many of those contracts also include enhanced language that references other forms of copying or displaying the text that might be developed in the future or other relevant language that more specifically reflects the already expansive scope of rights. Such grants are usually not limited to any specific format, and indeed the “form” of a book has evolved over the years to include variations of hardcover, paperback and other written word formats, all of which have been understood to be included in the grant of book publishing rights. Indeed, ebook retailers market, merchandise and sell ebooks as an alternate book format, alongside the hardcover, trade paperback, and mass market versions of a given title. Whether physical or digital, the product is used and experienced in the same manner, serves the same function, and satisfies the same fundamental urge to discover stories, ideas and information through the process of reading. Accordingly, Random House considers contracts that grant the exclusive right to publish “in book form” or.”in any and all editions” to include the exclusive right to publish in electronic book publishing formats. Our agreements also contain broad non-competition provisions. so that the author is precluded from granting publishing rights to third parties that would compromise the rights for which Random House has bargained. …

This passage, as lawyerly as it is, is a shot across the bow of authors and their agents. “We own the e-rights,” Random House is saying, “and if you get in our face about it, we will f*%$ you up.” One problem for Random House’s position is that the last time a publisher made this argument, it lost. The court in the Rosetta Books case held that a copyright license silent on new uses didn’t convey the rights to them. The publisher there? Random House. And the language at issue? Very similar to the language it now cites. The Authors Guild has published its own letter in reply, citing Rosetta Books.

The issue mostly arises for older contracts; in 1994, Random House altered its new contracts to include electronic rights. While this isn’t a universal practice, everyone now understands that publishing contracts need to be drafted with electronic publication issues in mind. It’s the older contracts, written for an analog world, that create the ambiguity through their silence. This “new uses” problem is a staple of the copyright classroom. The casebook I use pairs Rosetta Books with Boosey & Hawkes Music Publishers v. Walt Disney Co., in which Disney had licensed Stravinsky’s Rite of Spring for use in Fantasia, and the license stated, “The music of said musical composition may be used in one motion picture.” Held: this language permits distribution of Fantasia on videocassettes and laser discs.

This ongoing struggle between authors and publishers for control of backlist electronic rights is a useful piece of context for understanding the Google Books settlement, in particular the Author-Publisher procedures. Proponents say that the settlement cuts through a Gordian knot of difficult contractual issues to get the books, and money, flowing in a manner that’s fair to authors and publishers. Opponents, particularly among authors (including some frequent commenters here), say that it’s actually a land grab by publishers over rights that were never theirs. The clarity or opacity of the rights involved, and their placement as between authors and publishers, are factors that directly bear on the fairness and significance of the proposed settlement.

I don’t plan to cover this dispute extensively unless it directly impinges on the Google Books lawsuit and settlement, but I thought readers might find it useful to know about the connection.

Big name authors are signing up directly with e-publishers. Quite right too. If Random treats its authors like naughty children they will run away and join the circus.